9AUGUST 2022INSTILLING OPERATIONAL EXCELLENCE IN YOUR COMPANYI have developed below schematic where some key areas of opportunities are or reversely areas you are challenged with. This model is not meant to be exhaustive, but it gives a good starting platform to work from.The opportunity foundation is made up of Operational Expense, Manufacturing Throughput and Inventory.What is Operational Expense exactly? I a nutshell it is the cost of material, labor, indirect and fixed cost. This on itself works as an eye-opener when properly looked at. What do I mean with this? Well it is critical to understand how your product cost is built up % wise across these. What is the Pareto breakdown of these categories and within each of these categories. By the way Pareto (also known as ABC) is my all-time favorite how to look at things separating the trivial many from the important few. Then deeper investigate the possibilities and opportunities. What other operational expense can be scrutinized by monitoring actuals versus budget by example, what are the material variances or performance variances versus standard hours of work, target utilities and so on ... What is value-add versus non-value add activities or cost in your operations?Increasing Manufacturing Throughput is a matter of process flow across your production floor or rather on a broader scale of your Operations. Value Stream Mapping (VSM) is a powerful LEAN tool to get a grip and overview on things, identify gaps and to use as a basis for optimization. ASSESSING THE BUILDING BLOCKS TO OPERATIONAL EXCELLENCE
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